Good news! The Federal Government and the State Attorneys General have negotiated a deal with the Top 5 Loan Servicers (Bank of America Corportation, JP Morgan Chase & Co, Wells Fargo & Company, Citigroup, Inc & Ally Financial Inc -formerly GMAC) to speed up the Short Sale process!
This is wonderful news for buyers looking for a deal and sellers needing to make some changes in their financial lives. In the past it could take anywhere from 3 months to almost a year to get an acceptance or a rejection from the service provider. For a buyer, that means you are waiting for months on end before you even know if the service provider will accept your offer! And for the seller, the stress of wondering when, what and how can just be too much. Now, both parties will know that there is an end in sight.
The new requirements are:
- When the borrower (the seller of the home) requests a Short Sale Package, the Servicers must provide them with a decision within 30 days.
- Once in receipt of the Short Sale Package, the Servicer must notify the borrower if they are missing any required paperwork. It's just my opinion, but I think for the last few years if the package wasn't complete it somehow found it's way to the trash! So, this is great news!
- Once the borrower (the seller of the home) gets an offer and sends it in to the Servicer, the Service must notify them immediately if there will be a deficiency payment needed to approve the Short Sale.
- They are also forming internal review groups to monitor the process and there are fines from $1 Million to $5 Million for the Servicers that are not complying.
What does this really mean for you if you are thinking of Short Selling your house? It means that the time line will be shorter now than it has been in the past, but it's not gonna be a 30 day close like a "normal" sale.
The one thing they don't talk about is this ... the Servicer won't start the review of your Short Sale Package until you have a contract in hand most of the time. So it's important to make your decision to Short Sale early on when you know you are having a financial problem. You need to get it listed, under contract and then submit your Short Sale Package to the Servicer at least 30 days prior to getting a Foreclosure Sale Date. It comes back to this... if you are late on your mortgage, don't wait to contact an EXPERIENCED agent about your short sale options. Not all agents are skilled in this area, find one that is. Call the Servicer, take notes and order your Short Sale package so you can start filling it out and be ready for when the buyer shows up with a contract in hand.
My experience has been that things are getting better. We just did a VA Wells Fargo Short Sale in 3 months. That is a marked improvement over the last one which took 5 months. Things are moving in the right direction!
Don't wait for a miracle. If you are 3 months late, you are begging to be foreclosed upon. Don't do that! A Short Sale is a much better alternative for you, your family, your credit and your future. Especially now that the main 5 servicers are making the process smoother and faster. Visit AskCathy.com
, we can help you make the right decision for your family. We have references for reputable Attorneys and Accountants in the Kansas City area too. Don't go it alone! Help is right here.